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CWmike writes "AT&T has moved closer to charging special usage fees to heavy data users, including those with iPhones and other smartphones. Ralph de la Vega, CEO of AT&T Mobility and Consumer Markets, came close on Wednesday to warning about some kind of use-based pricing while speaking at a UBS conference. 'The first thing we need to do is educate customers about what represents a megabyte of data and...we're improving systems to give them real-time information about their data usage,' he said. 'Longer term, there's got to be some sort of pricing scheme that addresses the [heavy] users.' AT&T has found that only 3% of its smartphone users — primarily iPhone owners — are responsible for 40% of total data usage, largely for video and audio, de la Vega said. Educating that group about how much they are using could change that, as AT&T has found by informing wired Internet customers of such patterns. De la Vega's comments on data use were previewed in a keynote he gave in October at the CTIA, but he went beyond those comments on Wednesday: 'We are going to make sure incentives are in place to reduce or modify [data]uses so they don't crowd out others in the same cell sites.' Focus groups have been formed at AT&T to figure out how to proceed."

Welcome back to 2000. Data-usage fees per MB were common place back then. Now it's all based on the actual bandwidth, 512kbit/s, 1mbit/s and so on, like it really should be. Use how you want to. In Europe that is.

It's funny to think that USA should be the best nation with technology and infrastructure, but still your internet connections suck this much.

Comcast was yelled at for throttling access to "heavy users," but slashdot linked an article where it proved that heavy users do not actually impact performance on the network for everyone else. (Hence, the throttling was a bogus move.) My question is does this extend to cell networks?

It sounds like De La Vega is saying it's going to improve service when they educate smartphone users, and the users curb their heavy usage. Does heavy usage of a smartphone impact service for other phone users? Or is this anot

Comcast was yelled at for throttling access to "heavy users," but slashdot linked an article where it proved that heavy users do not actually impact performance on the network for everyone else. (Hence, the throttling was a bogus move.) My question is does this extend to cell networks?

It doesn't. Cell networks are an entirely different animal. Comcast can add more bandwidth by allocating more channels on the cable plant to DOCSIS service and/or splitting your neighborhood into different coax nodes so fewer homes/businesses share the same bandwidth pool.

Wireless companies have a much harder time adding more channels. Spectrum licenses cost billions of dollars and oftentimes will come in an entirely different frequency plan that isn't compatible with existing devices (see T-Mobile's AWS purchase for a good example). Up to a certain point they can add more towers to make the footprint served by each tower smaller (analogous to Comcast splitting the node in your neighborhood) but this isn't always feasible. Community opposition and zoning requirements are often major stumbling blocks to building more cell sites. Interference from other cell sites is also a factor.

The wireless data network was never intended to be used for large sustained transfers. It was intended to be used for remote productivity, light web browsing and other intermittent uses. Some of the engineers I've talked to at Verizon are even honest enough to admit this. This whole problem could have been avoided if the carriers had been honest in their marketing when they were rolling out data services.

Community opposition and zoning requirements are often major stumbling blocks to building more cell sites.

Actually, the BIGGEST problem is getting the backbone to the tower. You have some opposition to towers, yes, but you can build whatever you like? If you can't run a pipe to it, all you've got is a ugly looking tree [roadsideamerica.com] and nothing else.

That's the problem the telcos are running into right now? They're all trying to cut back on wireline services and boost their carrier network, but all of them run into a b

There are still plenty of providers that charge by the MB. But maybe those are just US providers. For web hosting and dedicated/colocated servers, many plans will say 1500GB per month allowance and then something ridiculous like $3/GB overage fees.

95th percentile billing is generally standard for good colocation. And probably should be the standard for all bandwidth billing (if it's not unmetered/unlimited)

This is why I use colocation providers that instead of 1500GB per month allowance or such tell you what speeds you can except. Like for example you get 50Mbps at peak times, 100Mbps at non-peak. It's still a shared line, but you pretty much get what is promised.

Usage-based billing is just trouble some and doesn't really make sense for the hosting providers either. They pay peering for the bandwidth, not per usage. Allowance is just there arbitrarily limiting the users, so they wouldn't use all the bandwidth

I currently have a Palm Centro with AT&T and decided not to pay for the "unlimited" data plan which is about $30 per month I believe.

However, I have on a couple occasions needed to use it to look up directions on google maps while in my parked car. A few minutes usage, and no more than about 1/2 a MB later I find a $5 charge added. Thats $10 per MB... RIP-OFF! If they did something like $10 per GB I'd be perfectly fine with that, since I wouldn't use the thing for video and music anyway, but to be able to occasionally check email or reviews on products before I purchase them that would be a reasonable amount.

Most people, even though they don't use data much, would much prefer to pay a fixed $30/mo and have no surprises than to pay as they go and end up with $150 in data usage some month.

By providing piecemeal pricing that's so high, almost everybody is herded into the fixed rate pricing to avoid surprises, even though if they did the math over a two year period they'd be better off with a couple of $150 "surprise" months and a few piecemeal months (say, $450) than had they paid the higher "unlimited" monthly plan ($720 for 2 years).

The big question I have to ask if they charge per meg. can they block advertisers So I don't have to pay for things I don't want? Usage based billing will kill the web advertising business. As 30-40% of a web sites download size is images and flash related to advertising if I am paying per meg i am not dbouleing my bill just for crap I am not interested in.

Good point. If they're going to charge per megabyte, then it actually makes sense to go back to having mobile versions of websites without anything more than absolutely necessary to display the content. That's part of the reason it was like that in the first place-- it wasn't *just* that the browsers were awful.

I suppose that would be possible if every part of the network could carry the maximum traffic of all the lines it feeds. But in practice that is not the case. For service delivery (lets say power) we pay a mixture of fixed costs for infrastructure and volume charges for the resource we use. I think that is the best way to go economically and it is fairer on all users as well.

One factor that most are missing is that most ISPs over subscriber their consumer class bandwidth.If every customer used all of the full bandwidth of their connection, the ISP's network would slow to a craw or worse. ISPs advertise all of these huge download speeds and how great they are. But they punish you behind the scenes if anyone dares to actually use it.

Mobile Broadband Providers have a trickier problem in that individual cell sites/towers are the bandwidth choke points. The amount of bandwith they c

Say I build a house and rent it out. Once the house is built it doesn't really cost me anything from month to month So the rent must be almost zero right?. Of course I had to borrow to pay for the house (the infrastructure) and I need to make monthly payments on top of the small costs involved with repairs, council fees, etc.

Say I build a house and rent it out. Once the house is built it doesn't really cost me anything from month to month So the rent must be almost zero right?. Of course I had to borrow to pay for the house (the infrastructure) and I need to make monthly payments on top of the small costs involved with repairs, council fees, etc.

You missed his point.

Let's say your house costs $500/month in upkeep/taxes/overhead. and another $500 in lost investment opportunity (interest on the value of the home). A reasonable rent would be somewhere along the lines of $1100/month. At that rate, you would be making 10% profit, which is a good target to shoot for in almost any business.

If you were to charge rates similar to what the phone companies are trying to charge for overage, then you would be charging $10,000/month.

Of course, since we are talking about the rental market, which is competitive, there is no way that you would ever be able to charge that as people would flock to your competition. However in the data market, all the companies have somehow and independantly stumbled onto this extremely inflated cost. They get away with it for two reasons, their product isn't a major life need, and people aren't yet used to using services which make use of the connnections which these companies were selling them.

OK, so it's like your phone company says it's going to give you a Lamborghini, but only charge you for a Kia. Then, you get the car, and discover it's actually a Kia with a Lamborghini body kit. Then you get your first bill, and discover they're still charging you for a Lamborghini... actually, for 10 Lamborghinis.

Here on Slashdot, we really like our car analogies; it's a long held tradition. However, for your benefit:

Say a pizza company comes up with a plan where you pay $300 per month for as many pizzas as you'd want with unlimited toppings. The company goes and advertises young people calling everyday to order a new variant of pizza, all smiling, happy, little pizza consumers. The advertising is effective, and the plan takes off; people everywhere are signing up for the $300 pizza deal. But instead of ordering Pizza the way the company wants/expected of 1 pizza a week (usually single pepperoni topping), college students actually order a fully loaded pizza every day. So now, the company is trying to tell people this small number of people are making it hard to do business because of a fringe group. In reality, the company is probably still doing well because the $300 covers the actual costs, plus they have all the people who aren't ordering pizza every day, but the profit margin just isn't enough. So now, some spokesperson is saying that in light of this fringe group, they might have to add a per pizza fee for each order on top of the $300/month.

I hope this helps and functions as a reasonable analogy of the problem.

This doesn't really work though. The infrastructure was built using government funds. It has already been paid for. Any usage fees are upkeep and profit. Guess which one is the reason the fees keep going up?

don't know about cellular network, but in MD taxes paid for Verizon's eastern shore fiber infrastructure. Last I checked my internet costs didn't go down because my taxes were paying for the infrastructure that would be generating profit for Verizon over the next 20 years.

IMHO taxes should never be used to buy infrastructure for private companies, ever. If they won't service a particular area, don't bribe them, tell them to serve the state or don't serve the state. If they won't, revoke their license to do

As a technical reason, I'm not sure why charging based on the bandwidth is superior, if you know that the vast majority of customers don't max out the connection most of the time. Charging by usage seems a little closer to capturing the proportion of resources a customer uses in that case.

There are other downsides to it, but they seem mostly like social ones, not technical ones. For example, people don't like feeling like they're being metered, and it has a chilling effect on a lot of online services if people have to worry about their bandwidth usage.

Social ones are mostly the problem. If I have to think that this action (visiting slashdot, downloading something, streaming music) will cost me specific amount, I rather don't do it. Add to that the fact that in most cases ISP's/operators charge a lot per MB, and it just sucks.

Technically it makes more sense to charge by bandwidth too. ISP's itself pay for peering by bandwidth, not usage. They just have to calculate how much their customers statistically use bandwidth and adjust their peering agreements by

While ISPs do pay by bandwidth (though large ones just peer directly with no exchange of money involved), I'd suspect their bandwidth usage, which is the aggregate of their customers' bandwidth usage at any given time, is better predicted by customers' data usage in MB, than by the size of customers' local bandwidth channels. If a bunch of your customers on 512 KB/s links start using their phones twice as much, that's going to have a bigger impact on the ISP's bandwidth needs than if a bunch of your custome

It's fact that the US is falling behind techonolgy wise and infrastructure wise. We don't have the best cell phones, or good internet access, or a highway system that's in good shape. Most of our energy is from coal and oil. Compare to ther counties that have modern nuclear power plants. Hell, we quit our own particle accelerated program and now cutting edge science is done at the LHC. I don't need the US to be the best, but I don't want the country to seem run down after a couple of decades of not moving forward.

Wrong. While our cellphones and internet access suck compared to Finland and Japan, our highway system is probably the best in the world, even better than Germany's. (Unfortunately, our drivers are horrible and can't obey simple rules like "keep right except to pass", so Germany has a much better driving experience than ours, and gets much better usage out of their highways than we do.)

Now, this doesn't mean that it doesn't have some problems in places, such as intra-city highways (and bridges) in some ol

Another sense of Deja vu: years ago AOL started offering unlimited connection, appearntly expecting people to not actually start using much more time.

The results of ATT's experiment duplicate the results AOL got about 10 years ago. So obviously this is taking ATT by suprise. Different company. Different product: this is phones, not dialup! And of course they can't be expected to think about wheter or not they could meet demand before offering it.

This just reinforces why Europe sucks compared to the USA. How are your cellular companies supposed to realize giant profits for shareholders if they can't charge by the megabyte, and use a low-profit flat fee model instead? Even worse, your companies don't lock customers in with long contracts the way ours do. Things like these are why your companies' CEOs get paid so much worse than ours. Go USA!!!

The fact that USA is a really big country doesn't really matter. Like USA, not all of Europe is heavy-density populated. Scandinavia for example has much smaller population density than USA, but in cities people get 100mbit/s to home, even 1gbit/s. If you're living off a city, 24mbit/s is common place. And no such bullshit than usage fees.

The USA is too spread out for traditional mass-transit systems to work very well here, except in a very few exceptional places with high density, like NYC, SanFran, etc.

The best solution to mass-transit in the USA is "PRT", personal rapid transit, like SkyTran [skytran.net]. With modern computer technology, we don't need an obsolete mass-transit system that takes lots of people from point A to point B; we can now make a system that takes individuals anywhere they want to go in a grid.

The problem is that ATT doesn't really want metered access either. Based on the statistics they are putting out, a huge majority of the iPhone users end up using very little of their data connection. If ATT moved to a metered access they would lose money because people would end up not using enough to add up to $30/month unless ATT priced the data at some astronomical rates. If they did that, they would simply be shooting themselves in the foot because people would quit using data (that's one way to fix the network problems lol).

So, the solution is to keep everyone on 'unlimited' at $30/month and issue press releases blaming these 'heavy users' for the network problems without actually doing anything to fix the issue. It's not really ATTs fault, it's these mysterious heavy users fault. Don't blame us, blame them while we keep laughing all the way to the bank and you (att users) keep dropping calls and getting crappy service. Brilliant plan actually.

I'm not sure why you'd say that, since the article is about cell phones which are usually vendor locked. Sure, you might be able to buy unlocked smartphones on eBay, but the vast majority go into an AT&T store and buy the thing. And then there are the contracts... Joe Bob goes into AT&T and buys a Blackberry, and to get the best deal he gets locked into a 2 year contract. Even if he pays the early termination fee, he still can't use his locked phone on another network.

It's a business opportunity for other ISPs to offer unlimited access and compete with these greedy assholes.

How are you defining "greedy"? I haven't read their financial statements but I doubt their profit margins are out of line with the rest of their industry. Seems like lately a company is automatically labeled "greedy" if they expect any profit at all. So what's greed? Is it 5% margin? 10%? 25%? Where's the line?

I'd say greedy is luring in customers by advertising unlimited access, requiring them to pay $30 every month for two years for that access whether they need unlimited or not, and then deciding that they're using too much of their "unlimited" connection. I still don't understand how it's not illegal to advertise something as unlimited, and then limit it.

If they can identify 3% of people are using 40%, then by all means put a 'cap' on the fixed price service that *doesn't* affect the 97% of normal users. Charge for extra service for the offending 3%. They just use this as an excuse to slap everyone with higher rates.

They won't want any less money than the get now so people with data plans who use 100MB or something small like that will still pay the bend-over-and-take-it price they do now. Then people who use the 5GB that is allowed on the data plans will have to pay even more. Somehow I doubt AT&T is losing money charging the average iPhone user $100 USD per month.

Company with fanatical users (Apple) creates a product that is data-heavy. AT&T must have seriously botched their usage projections, not bothered to do any, or figured they're just foist extra fees on their customers when it started to be a problem because they know anyone wanting an iPhone can't jump ship to a competitor.

I'm really suprised they didn't try to blame this on jailbroken Iphones using tethering. It seems exactly like the type of thing they would scapegoat it on. They're trying to discouage both, and I could -actually- believe that's a -part- of it.

I'm guessing they so misjudged usage that even if they stamped out tethering they still would be over, so they're trying to charge even people who aren't tethering.

Since when is anyone at ATT smart enough to think of what you described?

I got a nasty gram from them the other day. It said my bill was late and if I didn't pay the bill immediately my service would be shut off. Then there would be fees, etc... Guess how much it finally said I owed? $0...yep ZERO dollars. If they are paying postage and paper costs to send out letters like the one I received I can't imagine what other idiotic things they are doing.

I understand AT&T's position. They simply cannot grow their network fast enough to keep up, and the lack of bandwidth is a pain shared with all customers. The problem AT&T is having is that the iPhone isn't unique anymore. There is Droid and Palm and they'll still have unlimited data plans. Plus, if the iPhone U.S. exclusivity ends, the other carriers will quickly start offering the iPhone too.

AT&T can't charge for data plans if no one else does.

You believe AT&T? Based upon what data? Their FCC reg filings show them in compliance with their cell network...

If they can identify 3% of people are using 40%, then by all means put a 'cap' on the fixed price service that *doesn't* affect the 97% of normal users. Charge for extra service for the offending 3%. They just use this as an excuse to slap everyone with higher rates.

The sad part is todays blood-sucking lawsuit-happy society is a customer could probably sue on grounds of discrimination with your solution...

Yeah. Metering just causes too many social problems. Many people just write off entire services if they have to keep track of how much they use.

I've always been in favor of you get X MB uncapped per month. Once you cross X MB, then you get throttled (yes... evil throttling...) . I think lets the user get away without worrying about anything. It also allows ISPs to target that 3% of users who are streaming videos all the time.

If they can identify 3% of people are using 40%, then by all means put a 'cap' on the fixed price service that *doesn't* affect the 97% of normal users.

Well ultimately their intent is not just to make the 3% pay more for the extra usage, but to make *everyone* pay more. It's just that they need an excuse to do it, and blaming other users for over-using the service gives them that excuse. These cell carriers want to advertise data services, they want to charge for data services, but they don't want to actually provide those services unless you pay extra.

Usage distributions are often expontential or look near to an exponential distribution (other distributions would be power-law distribution or pareto distributions).

This means that a small proportion (20%) uses more resources than say a majority (80%). So it fits this case quite well.So most people use 60% of the ``bandwidth'' or less and 3% use 40% of the bandwidth.

The problem here is that these distributions are scale free. This means there will always be a heavy usage proportion which uses way more than

[nosarcasm]Corporate America: our mistakes are our customers' fault and they need to pay through the nose or else they'll never learn.[/nosarcasm]

[sarcasm]Maybe with all the extra money they'll be getting with this, they'll upgrade their network so they can actually give people what they said they would give them at the price they said they would![/sarcasm]

This story should have been declared "AT&T Declares war on customers". For reasons unknown, AT&T just doesn't grasp the idea of upgrading their network. So they provide shoddy service and blame their users instead. They do everything except take care of their network and their customers. Why do they insist on infrastructure upgrades as a last result? How can they grow when they can't handle what they have now?

They recently ranked dead last on a major US survey of cell phone providers for every single category. In all seriousness, what are they going to do when they are no longer the exclusive Jesus phone provider? People put up with for lack of an alternative network for their Jesus phone, without that exclusive they would start hemorrhaging customers.

Seriously, this is not the sort of thing Apple can ignore. Metering by the megabyte makes the iPhone less fun. It cuts into the experience. This is a serious threat to the iPhone and Apple's profit margin, and I really don't think Steve is going to take this lying down. No matter how many livers he has to go through.

If I had a Blackberry or an iPhone, they would charge me $30-40/mo just for data for said phone. Same deal for any smartphones that AT&T sells themselves.

Fortunately for me, I purchased a smartphone that AT&T doesn't sell (got it from Nokia's website) and can get away with paying $10-15/mo for "Unlimited" (i.e. 3GB/mo) data.

That said, I don't think I've ever used more than 400MB/mo, probably averaging less than 200MB/mo. Now if they would provide a 200 min/mo voice plan, I would be much happier. I've somehow managed to wrack up over 1,500 Rollover minutes in the past 5 months with a 450min plan....

1. Sell 3G Iphone and advertise that it can browse the web, download songs, etc.
2. Tie in I-tunes, drm, and a lot of other nasty crap so that once the user starts using it, he loses everything he's purchased (music, apps, etc) if he stops.
3. Increase the price on those users because they doing something "wrong" by using it too much.
4. ?????
5. Profit

Screw that bullshit. I think I'll keep using my phone as just a phone, until these guys get their heads out of their asses. Do folks really have tha

And yet, they want me to pay $100 to "upgrade" my iTunes store-bought music (the worst mistake in my online purchasing history...) to the DRM free version. Sounds like it was just another way for Apple to make more money.;)

I am so tired of ISP's blaming their customers for the shortcomings of their network. The problem is with the way AT&T designed their network, not with the way customers are using it. Their network was not designed to handle TCP. They break TCP congestion control by not allowing packet loss. As soon a high traffic condition is reached, every affect TCP connection retransmits even more, and the situation quickly spirals out of control to where nobody can get a packet through.

"AT&T has found that only 3% of its smartphone users — primarily iPhone owners — are responsible for 40% of total data usage, largely for video and audio"

And, this is different from ISP traffic and users how exactly? Give me a break. Stop playing the part of ignorant moron provider here whining about excuses.

If you're gonna raise our rates, then fine, raise them. Yeah, I know it's to line your greedy pockets, so don't sit here and make me think that my "misunderstanding" of what a fucking "wireless" megabyte is the reason you're doing it.

>>A guy who's looking forward to his contract ending so he can get an Android on a network that hopefully sucks less.

I've been enjoying the droid on Verizon. The 3G is decently fast, and has pretty good coverage (I've yet to be in an urban area that wasn't covered, and I've been all over the country in the last couple weeks). And you can always enable wifi if you want better bandwidth, less latency, or are worried about being tagged a data hog.

If those worthless twits at AT&T, who already have the lowest satisfaction of any cell provider, and already charge at a very high rate (for two iPhones and a big rollover + unlimited texting - I pay $260.00/mo) add on a data surcharge I'll drop the cell contract instantly - and I do mean instantly.

It is a recession and tossing $3k/yr out of the office account into two iPhones only to see the brilliant minds at AT&T come up with this idea - well, let's just say that the iPhone will become a touch/Sk

They advertise the Iphone and the other media phones as being able to get streaming music, check football scores, write email, do all this neat stuff with AT&T!.....and then they get pissed when people actually DO it?

Personally, I'd be *happy* with usage based fees, if they were 'reasonable' and if you could easily check how much you were using real time (without incurring more usage, similar to checking one's balance on a prepaid phone). I'd be happy with it, as long as the minimum went very close to zero if you didn't use it. (A small fee to have 'access' to data along with voice seems somewhat reasonable.) In other words, I'd like the ability to use an iPhone on current prepaid phones where you can easily get unde

Assholes. They already do that. There's a couple of different "unlimited" plans, depending on how much AT&T thinks you'll use that specific phone on the network. I pay $30 for unlimited internet, others pay $15. No cheating and using a crap phone to activate and then changing SIMs either, if it's an AT&T branded phone, they know and kick you off your plan.

I keep predicting some sort of per-byte fees are inevitable, and people keep arguing with me. "It's not the tragedy of the commons because they can always build more bandwidth." No, wireless bandwidth is regulated by the FCC and finite. Why some people are so violently opposed to using simple economics to keep a few users from adversely affecting everyone else's user experience is beyond me. Sure, AT&T could build a better 3G network, but if you expect that grandma (that only uses a data connection to check her email once a day) should be subsidizing your addiction to streaming porn videos, you are one selfish son of a bitch.

Our new device is really cool! You can watch video, listen to mp3s, and surf the web. But please don't do any of those things. Our network isn't designed for it. If our device changes your life like we advertise we'll need to charge you a lot of money to keep using our network. Because people who use our network as advertised our bandwidth hogs. Ok? Sound good? Great!

Whether it is AT&T (my carrier) or not, the first wireless company to do this with will drive away smartphone users by the millions. Once that first usage-based bill hits, the cancellations will come rolling in.

I am willing to pay $30/month for mobile Internet. I am NOT willing to pay $100/month in the future for the same usage. I'll either switch phone companies, or failing that, I'll just switch back to a phone without the data plan and do without mobile internet access.

Data has shown that iPhone users average 400MB/month. This is far and away the most by any group. AT&T charges $30/month for the iPhone data plan. That equates to over $60/GB but AT&T and just about every other carrier charge that amount for 5GB/month data plans. Doesn't make sense does it. Carriers are claiming they can't make money at $60/GB data while they charge only $12/GB on data only plans.

I think we would all be giddy as school girls if they just charged everyone $12/GB for data making the average cost for data for iPhone user drop from $30 to $6. But for some reason I doubt that will happen.

...and all I see are the same types of statistics that are strolled out by the ISPs when network usage and congestion become a problem. "Blame the top 3%!" "Bandwidth hogs!" "Piracy accounts for 75% of lost revenue!" Whoops, that last one slipped in but I think you get the point.

There are always going to be maximum and minimum users - the whole idea is that, on average, you can handle the load. If you can't handle the load the problem is not the end user - it's you.

AT&T has received plenty of money with which it could expand it's infrastructure. It could relieve the bandwidth bottleneck by releasing the iPhone exclusivity. It could have realized that unlimited users are going to consume as much as they can. Now they're on the hook and they want to blame the user? No, that doesn't float.

(And if I see one more "unlimited*" notation I'm going to scream. When did unlimited get redefined as "limited to..."? Why is that not false advertising?)

It would be just as correct to say that they found that 97% of their users are not properly taking advantage of their *unlimited* data plans. I've heard their argument with regard to home cable internet service. "1% of users are responsible for 90% of bandwidth usage". Well, when 99% of your users don't really need 6Mbps, but are paying for it anyway, they're being oversold. Those that take advantage of what they pay for are making good use of it. We need to turn this problem on it's head. Maybe automatic tiered pricing up to the unlimited plan. That would be more fair to light users. Of course, in that case, it is in AT&T's best interest to do nothing.

Yes, that's the way to do it. Before the industry even comes close to reasonable wireless throughput, they're going to take careful aim and shoot themselves right in the foot. With wifi becoming more and more ubiquitous, and providing a user experience an order of magnitude better than 3G, and more and more devices coming out with wifi standard, what the hell do we even need data service for? It's expensive (a wireless data plan costs as much or more as a DSL line) butt slow, quirky, has huge latency, and now, it's going to be even more expensive. Way to kill an industry.

Rather than try to find ways to charge users more for increased data transfers, AT&T needs to improve their infrastructure to support these needs. Those heavy users that they want to penalize are the vanguard of the future - everyone will be using more bandwidth as web pages get more complex and video / audio streaming becomes even more common.

Increasing fees per MB now will provide a short-term increase in revenue - but it'll also open a window of opportunity for their competitors. Does AT&T want to be part of the future or would they prefer to be a "has been" on the sidelines as progress marches on?

I've said this before in other forums. The beauty of this idea is that there will ALWAYS be a top 3% list of of abusers. This is just a scam by AT&T to get more money. If/When Verizon get's the iPhone, people will bail on AT&T in droves. This will have the effect of reducing AT&T's overloaded network, but it will still leave the users with the bill...